Aussie asset recycling program stumbles after Ausgrid bid officially rejected

Australia's asset recycling program has taken a hit after Australian treasurer Scott Morrison officially blocked foreign bidders from purchasing electricity distributor Ausgrid on Friday.

Nine months after selling New South Wales state electricity provider TransGrid to a consortium of investors, including those from the Middle East, Morrison provisionally blocked Ausgrid's sale to Chinese bidders, citing national security concerns. Morrison gave the bidders one week to revise their bids to allay his concerns.

But after "due consideration" of responses from China's State Grid Corp and Cheung Kong Infrastructure Holdings (CKI), the sale would not proceed as structured.

"In making this decision, national interest concerns have been paramount," Morrison said in a statement on Friday.

"They relate to the transaction structure as currently proposed and the nature of the assets."

Ausgrid had been expected to fetch over 10 billion Australian dollars (7.6 billion U.S. dollars) for New South Wales (NSW) state coffers to fund Australia's largest infrastructure renewal program through capital recycling from infrastructure privatisation.

"There are many bidders that are interested in this asset," NSW state Premier Mike Baird told reporters in Sydney on Friday, assuring the ambition has not been derailed.

The price-tag, however, will almost certainly be at a discount.

Baird said he respected Morrison's decision, adding national interest is paramount; however, he reiterated his frustration that "these issues should have been resolved much earlier."

"(But) obviously, we need to move forward," Baird said, confirming the bidding process will begin once again. Endit